"We're basically waiting to see how beaten up people's psyches get and where they're willing to sell assets."
That was the brutally honest assessment Blackstone CEO and co-founder Steve Schwarzman gave investors about the US private equity giant's intentions for Europe as the continent teetered on the brink in December 2010.
For those unfamiliar with the modus operandi of Blackstone, Schwarzman's proud declaration of his intention to take full advantage of the economic misery being experienced across the European Union may have come as something of a shock or surprise.
In reality, however, the Blackstone chief was simply stating what Ireland and other EU states could expect as his and other 'vulture' funds swooped to feed on the carcasses of property markets hit by a financial tsunami following a decade of easy credit.
As the private equity giants piled in, Finance Minister Michael Noonan for one welcomed their arrival as a sign of confidence in the Irish economy. A cursory inspection of just some of the transactions they engaged in however throws up details that may not be welcomed by the taxpayer.
Take the case of One Warrington Place, the six-storey office building on the corner of Mount Street in Dublin 2. Developed by David Arnold's D2 Private, the block which houses Bord Gais's headquarters was first sold by Nama in an off-market deal to the US fund Northwood Investors in 2012 for €27m.
Last year, Northwood sold the property on again for €42m, or €15m more than it had paid just two years earlier. To make matters more unpalatable for the taxpayer, Northwood's original purchase was facilitated by the provision of substantial vendor finance or loan finance from Nama, meaning the fund had to come up with far less of its own money to secure ownership of the building, which it then sold on for a substantial profit.
Another case where Nama would appear to have sold too early and too cheaply is the 0.75 acre freehold site of 1-6 Sir John Rogerson's Quay in the heart of Dublin's thriving docklands. Acquired by developer Bernard McNamara in partnership with financier Derek Quinlan during the boom, Nama sold the site to Australian student accommodation specialist, Urbanest, in June 2013 for €7.5m. Last August, the lands were sold on by Urbanest again, this time for €17.75m to Hibernia REIT, the property fund headed up by former Nama senior portfolio manager Kevin Nowlan.
Hibernia REIT was back in the market for former Nama properties again last August, this time purchasing the Forum Building in Dublin's IFSC from US private equity firm Atlas Capital for €37.8m. The price represented a near €10m premium on the sum Atlas had paid Nama just two years earlier when it bought the 47,000 square foot building and its 370 car parking spaces for €28m.
Elsewhere in the docklands, developer Chris Jones managed to make a killing after snapping up Dock Mill, a 19th century warehouse at Grand Canal Dock which Bernard McNamara had intended to convert into a small scheme of luxurious waterside apartments. Having acquired the building from Nama in 2013 for €1.3m, Jones spent €1.4m converting it into offices before selling it to Google for €13m last January.
But while hindsight shows the timing of Nama's sale of individual assets was badly timed, the millions of euro foregone in the above cases pales in significance when compared to the agency's disposal of Project Holly - the portfolio of loans associated with Meath-based developer Sean Reilly's McGarrell Reilly Group.
While it is unclear what discount Nama obtained when it took over Reilly's €373m in borrowings from the banks, it is abundantly clear how badly it got things wrong when it sold his companies' loans to US fund Lone Star for €220m in January 2014. For where the State's so-called 'bad bank' may have made a handsome profit on the sum it had to pay Reilly's banks, it could have made far more judging by the return Lone Star achieved when it in turn sold the majority of the developer's assets on again in March of this year. All told, Lone Star obtained €350m when it flipped the portfolio of prime commercial properties which included the Iveagh Court Complex in Dublin 2 and the Watermarque Building in Dublin 4 to the US-headquartered mortgage REIT, Starwood Property Trust.
While that additional €130m would have come in handy for Finance Minister Michael Noonan as he prepares this October's austerity-easing budget, spare a thought for Sean Reilly himself. Had Nama held out, it could have come close to recovering the full value of the debt he owed to his banks before the crash.